Virgin Australia Financially Secure? [Now in Voluntary Administration]

[tomlee1986]

It appears the administrators will need to borrow $200m to keep Virgin going to it sells. I was going to say if but I am confident it will.

I doubt many banks will let a company who already cant repay debts to take on more debts... but I hope I am wrong on that

 

[Bagpuss]

I doubt many banks will let a company who already cant repay debts to take on more debts... but I hope I am wrong on that

It will be Deloitte who are taking the risk and would have applied for the loan. It would also represent their confidience is the airline being sold.
On the other foot, it means less money for those creditors.

 

[tomlee1986]

It will be Deloitte who are taking the risk and would have applied for the loan. It would also represent their confidience is the airline being sold.
On the other foot, it means less money for those creditors.

I do hope Deloitte gets the loan they desired... as I would sincerely hope VA survives this administration

 

[hydrabyss]

It will be Deloitte who are taking the risk and would have applied for the loan. It would also represent their confidience is the airline being sold.
On the other foot, it means less money for those creditors.

I was under the impression Virgin had some money in the bank but from reading today they may have not had much left at all. Although what was left would have kept me busy for a number of years.

 

[muppet]

It appears the administrators will need to borrow $200m to keep Virgin going to it sells. I was going to say if but I am confident it will.

May I ask the source of this? Can't find the details via google

 

[RooFlyer]

May I ask the source of this? Can't find the details via google

The Oz on-line has a paywalled story:

Virgin administrator Vaughan Strawbridge will borrow around $200m to help keep operations afloat pending a decision on the sale of the airline.

The loan indicates Virgin was not quite as liquid as imagined when the administrator was called in on April 21.

It is understood free cash stood at just $30m when Mr Strawbridge was called in.

A conga line of bidders is looking at the airline.

Strawbridge is likely to seek court approval to extend his term in chair beyond the indicative time of August 22.

 

[hydrabyss]

The Oz on-line has a paywalled story:

That's the story I read, makes $30m not sound like much these days.

The last amount Virgin asked the government for was $200m.

 

[tomlee1986]

That's the story I read, makes $30m not sound like much these days.

The last amount Virgin asked the government for was $200m.

30 Million dollars in airline terms is basically nothing.. almost all used up by the end of a day in normal operations... definitely wont be enough to even last a week during shut down.. lol

 

[milehighclub]

30 Million dollars in airline terms is basically nothing.. almost all used up by the end of a day in normal operations... definitely wont be enough to even last a week during shut down.. lol

Correct! QF is burning $40 million a week.

 

[jakeseven7]

Binding offers due in June for VA1.

How quickly would VA2 be launched....

Virgin Australia targets end-June sale: administrator

Twenty parties are interested in recapitalising Virgin Australia, administrator Deloitte said after the first creditors meeting held virtually on 30 April, and the airline aims to receive binding offers in June. "A large number of parties have expressed an interest, eight have signed...

www.flightglobal.com

 

[hydrabyss]

Correct! QF is burning $40 million a week.

I read this morning that Qantas have borrowed another $550m against a few more planes.

 

[hydrabyss]

Binding offers due in June for VA1.

How quickly would VA2 be launched....

Virgin Australia targets end-June sale: administrator

Twenty parties are interested in recapitalising Virgin Australia, administrator Deloitte said after the first creditors meeting held virtually on 30 April, and the airline aims to receive binding offers in June. "A large number of parties have expressed an interest, eight have signed...

www.flightglobal.com

So what will be the going price. I read something this morning around $5b including debt. Their sales pitch is also saying they can get costs almost down to Jetstar level by reducing the fleet and some routes.

If they can offer something in between Qantas and Jetstar and still offer some perks to entice corporate flyers, especially those on a tighter budget moving forward. Ditch the free snacks on short flights and offer something at a reasonable price for customers to purchase.

 

[Plutonus]

The AFR is reporting Virgin had $150m of 'available' cash on the day they entered voluntary administration, but one bank has since withheld $120m of that, resulting in the $30m of cash being reported.

...The company's cash balance was about $150 million on the day it went into administration.

It has since shrunk to $30 million because one of Virgin's key banks has been withholding about $120 million in cash and refusing to give it to Strawbridge.

Chanticleer understands that on the day Virgin went into administration on April 22 it had a total of $870 million in cash including the $150 million available for day to day operations plus money on term deposits yet to mature and restricted cash held on behalf of secured creditors...

 

[hydrabyss]

The AFR is reporting Virgin had $150m of 'available' cash on the day they entered voluntary administration, but one bank has since withheld $120m of that, resulting in the $30m of cash being reported.

No mention of which bank.

 

[tomlee1986]

No mention of which bank.

Most likely to be one of the big 4 banks?

 

[RooFlyer]

Most likely to be one of the big 4 banks?

Or one of the 6 or so big investment banks?

 

[Melburnian1]

Correct! QF is burning $40 million a week.

No, that's what it 'hopes' to be burning by the end of June 2020 according to the 'Oz' article. While unstated, the implication is at present it is 'burning' more, as among other things it's had to naturally pay out annual leave in advance of what it would normally expect. Maybe some LSL payments will also start once various employees exhaust annual leave credits.

Am I correct that staff at both VA and QF are (where eligible, i.e. stood down) receiving the $1500 per fortnight JobKeeper payment but nothing on top of that unless they use up leave credits?

If some employees are made redundant - not wishing that upon you milehighclub, or anyone else - that will be further funds expended that one doubts any corporate entity in Australia would have planned for as of six months ago.

Given that Mr Joyce basically says he doesn't know what the level of domestic demand will be when flights come back, it must be difficult working out what number of staff the organisation will require after the JobKeeper $1500 per fortnight subsidies end in about five months (the PM has reiterated that it will).

QFi and even QFd may be anxious to avoid underestimating the number of staff it will need as recruitment and particularly training isn't instant and has a cost (in time as well as money). But at the other end of the scale, if it featherbeds excessively, returns to shareholders go down or losses rise.

Maybe eventually some staff will agree for a particular period to go on unpaid leave if all credits run out but the company believes there's some chance they'll be needed, with an agreement to advise them on a date in early to mid 2021 if that's the case?

 

[HS-TQE]

Virgin bidders set to team up after weekend talks

The 20 bidders for Virgin Australia, including Richard Branson, Andrew Forrest and AustralianSuper backed BGH, have been in frantic talks over the weekend to determine which bidders can team up, as the race to save the stricken airline heats up.

www.afr.com

Rehashes what was said earlier. Doesn't confirm, but it says that Etihad Aviation Group teaming up with Oakland Capital and Temasek (parent of SIngapore Airlines) with with BGH.

 

[jakeseven7]

Virgin bidders set to team up after weekend talks

The 20 bidders for Virgin Australia, including Richard Branson, Andrew Forrest and AustralianSuper backed BGH, have been in frantic talks over the weekend to determine which bidders can team up, as the race to save the stricken airline heats up.

www.afr.com

Rehashes what was said earlier. Doesn't confirm, but it says that Etihad Aviation Group teaming up with Oakland Capital and Temasek (parent of SIngapore Airlines) with with BGH.

God help us all, EY2, SQ2 and VA 2

 

[dajop]

God help us all, EY2, SQ2 and VA 2

Temasek is not SQ. SQ is very adept at, well, managing SQ and that is about all. Temasek has much a broader portfolio that it successfully manages, and its staff are very sharp.